Housing market activity 'still pretty buoyant'

The number of mortgage approvals made to homebuyers lifted in November, Bank of England lending figures show.

Some 70,410 mortgages with a total value of £12.3 billion were approved for house purchase in November, marking the highest figure seen since 70,748 approvals were recorded in August.

Meanwhile, consumer credit continued to grow at its strongest levels for almost eight years, prompting concerns about people's reliance on personal loans, overdrafts and credit cards in order to make ends meet.

The Bank's Money and Credit report for November showed the amount of cash being borrowed by consumers in the run-up to Christmas rose by £1.5 billion.

This means in November consumers owed a total of £178.2 billion on credit cards and loans, and is the largest since February 2008. In October consumer borrowing lifted by £1.2 billion.

However, some economists said the uptick in borrowing highlights consumers' improved confidence, and suggests the housing market and consumer spending will continue to power economic growth in the year ahead.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "The Bank of England data suggest that housing market activity is still pretty buoyant, although it appears to have levelled off recently.

"It may well be that a shortage of properties on the market is limiting housing market activity."

Mr Archer also pointed out that the rise in unsecured consumer credit in November follows on from data from the Office for National Statistics showing that the household savings ratio dipped to 4.4% in the third quarter of 2015, the equal lowest rate since 1963.

He added: "This will fuel concern that consumers are borrowing more and saving less to finance their spending, which is likely a consequence of relatively high consumer confidence and extended low interest rates."

Peter Tutton, head of policy at StepChange Debt Charity, added: "These figures show another substantial rise in consumer credit.

"Part of this rise this could be due to people shopping online or using credit to spread the cost of Christmas, but if credit balances continue to increase at this rate into the New Year then concerns about a new and possibly unsustainable credit boom will grow."